W18: Chicken Update

In W18 in the chicken landscape, Brazilian fresh chicken meat exports totaled over 408K MT in April, up 5.63% YoY and down 15% MoM, a new record for the month and the second-best result of 2023. The MoM decline was due to fewer working days in April (18 days) compared to March (23 days). The average daily shipment volume in April was almost 8% higher than in March. On the other hand, the average price achieved in April continued to decline by just over 2% compared to a year ago, when the market was moving towards the best prices in history. In any case, there was a slight recovery of 1.5% in relation to March, signaling price recovery. From January to April 2023, the export volume increased by close to 14.5%, while the average price increased by 5.5%. From January to February, the Brazilian internal housing of broiler chicks fell from just over 589M heads to close to 533M heads, down by almost 10%. This reduction was restricted to the monthly total, as the three days less in February meant that the subsequent offer of birds ready for slaughter (in March and the first days of April), when considering the average daily offer, remained practically the same immediately and for the same period. Thus, in the two-month period between the part of February and the first days of April, the apparent supply of birds ready for slaughter was around 18.26M heads per day, decreasing by more than 5% in relation to the previous two-month period (from December 2022 to the first days of February), when the average daily volume stood at approximately 19.27M heads per day. According to CEPEA, in April, in Greater Sao Paulo in Brazil, whole frozen chicken devalued by 2.8% MoM, with an average of USD 1.32/kg. Meanwhile, chilled product prices registered a decline of 2% MoM, with an average price of USD 1.33/kg. This movement was linked to the lower demand for chicken meat in the month. As a result, sector agents ended up reducing the asking prices, with the objective of guaranteeing the flow of the product and avoiding the formation of inventories. ABPA reports that the UK increased the import quota of poultry meat from Brazil by 20.7%, from 79.9K MT to 96.5K MT per year. This indicates that Brazilian exporters are expected to increase their revenue by at least USD 60M in 2023.

Poultry organizations COBK, LTO/NOP, and NVP agreed to waive the EU subsidy for vaccination against salmonella. The EU reduced the subsidy by 30% and it is no longer in proportion to the administrative burden. Therefore, Dutch poultry farmers can no longer make use of the subsidy scheme. The amount of chicken the US is allowed to dump in South Africa increased retrospectively to 71,632MT for the year ending March 2023. The allowance comes in the form of a substantial annual quota free from the anti-dumping duties that would otherwise have been applied. These anti-dumping duties (USD 0.51/kg) have been in force since 2000 and they apply to imports from the US of bone-in portions such as leg quarters. In 2022, the US accounted for 49.6% of South Africa’s bone-in chicken imports, and volumes increased in 2023 despite the spread of bird flu in the country. Uruguayan authorities began vaccinating poultry against avian flu with immunizers from the US. So far, 10 outbreaks of avian flu have been detected in Uruguay, but none of them in commercial establishments, and thus the country maintains its sanitary status. Argentine chicken prices in W18 ranged from USD 2.87 - USD 3.10/kg, down 30% after having touched USD 3.98 - USD 4.42/kg in the last two months. This is attributed to the increase in supply after the normalization of the weather. Lastly, Ecuador completed its first chicken meat export to the Bahamas, with a sea shipment of 28MT. The country is planning new exports to more destinations, with South America and Europe being among the main markets.